In this April edition of the RealtyHop Housing Affordability Index, we examine what American households across the 100 largest cities need to spend on housing to find out:
Is homeownership affordable or possible for the average American family?
Despite multiple signals that the Fed would cut rates soon, mortgage rates stay above 6.5% as the job market and inflation continue to defy expectations. Though housing inventory has increased with spring underway, affordability remains an issue in most markets This month, the median list price increased in 86 of our 100 surveyed cities, further burdening prospective buyers. Renters who decided to wait out the buying process in 2023 will likely not find more appealing options in the current marketplace.
Key Findings
- Homebuyers in 81 out of the 100 major cities we analyzed would have to spend over 30% of their annual income on homeownership; that’s the same as last month.
- In the 25 most unaffordable housing markets nationwide, homeowners spend at least 47% of their income on homeownership costs.
- California remains unaffordable for average Americans. Three of the five least affordable cities are in the state.
- Three of the top five least affordable housing markets became more expensive this month Irvine, CA, New York City, NY, and Long Beach, CA.
- Housing costs became less affordable in four of the more affordable housing markets this month – Detroit, MI, Toledo, OH, Fort Wayne, IN, and Wichita, KS.
A note about this report: beginning in 2024, we adjusted our methodology to better reflect the current state of the housing market. Please see the Methodology section below for more information.
The 5 Least Affordable Housing Markets
1. Los Angeles, CA
Los Angeles is the country’s least affordable housing market this month. With a median list price of $1,099,000, prospective buyers can expect to spend a significant 97.48% of their income on mortgage payments and property taxes.
2. Miami, FL
Miami maintained its spot as the second least affordable housing market. The median list price for a home decreased to $725,000, and the average family will spend 93.22% of their monthly earnings on the cost of owning a home.
3. Irvine, CA
Irvine continues to host the country’s third least affordable market. The median list price for a home in this city increased to $1,400,000, and homeowners can now expect to spend $8,284.87 a month on housing costs.
4. New York, NY
New York City remains the fourth most cost-burdened housing market. A family with an average income can expect to spend 73.06% of it on a home with a median list price of $825,000.
5. Long Beach, CA
Long Beach takes the fifth spot on our list of least affordable housing markets. Prospective buyers with a median income of $80,575 can expect to spend $4,561.41 on mortgage payments and property taxes monthly.
The 5 Most Affordable Housing Markets
1. Detroit, MI
Detroit remains the most affordable housing market nationwide this month. An average family can expect to spend 17.99% of their monthly income on mortgage and tax payments.
2. Toledo, OH
Toledo still has the country’s second-most affordable housing market. With a median list price of $106,000, buyers can expect to direct 18.25% of their income toward homeownership costs.
3. Fort Wayne, IN
Fort Wayne remains the third most affordable housing market. Homeowners with an average income of $59,398 will spend $1,187.03 monthly on mortgage and tax payments.
4. Wichita, KS
Wichita ranked as the fourth most affordable housing market. The median list price increased to $210,000 this month, and buyers can expect to spend 25.18% of their income on housing costs.
5. Buffalo, NY
Buffalo became the country’s fifth most affordable housing market this month. Households can expect to spend 26.57% of their monthly income on a home with a median list price of $170,000.
Housing Markets to Watch
The following housing markets witnessed significant changes this month.
Orlando, FL
Orlando jumped nine spots in the rankings and became the 57th least affordable housing market. The median home price has increased by 5.59% since last month, now reaching $359,000. Homeowners can expect to spend 38.22% of their monthly income on housing costs.
Laredo, TX
Laredo became more affordable for homeowners this month, decreasing to the 80th spot in our rankings. Households with a median income of $62,147 can expect to spend $1,597.49 monthly on homeownership.
Greensboro, NC
Greensboro dropped seven spots in the rankings and became the 64th least affordable housing market this month. The median list price decreased to $285,000, and homebuyers with a median income can expect to direct 36.95% of it toward mortgage payments and property taxes.
Methodology
The RealtyHop Housing Affordability Index analyzes proprietary and ACS Census data to provide an index of housing affordability and homeownership burden across the 100 most populous cities in the country. Median home prices are calculated using over 800,000 listings in the RealtyHop database over the month prior to publication.
To calculate the index, the following statistics are used:
1) Projected median household income
2) Median for-sale home listing prices via RealtyHop data
3) Local property taxes via ACS Census data
4) Mortgage expenses, assuming a 30-year mortgage, 6.805% mortgage interest rate based on reported weekly averages in March, and 20% down payment.
March 2024 Methodology Update
Instead of assuming a fixed mortgage rate, starting with this month’s report, the RealtyHop Affordability Index calculates the monthly payments using the 30-Year Fixed Rate Mortgage Average reported by Freddie Mac. In the past, our calculation for median prices included all closed and active residential listings created within a month prior to the publication of each report. Moving forward in 2024, the median price is only calculated based on list prices. This change will better reflect the conditions prospective buyers face in a given market.
